Post(s) tagged with "Economics"
- Matt Yglesias at Slate, explaining that getting pregnant doesn’t make teen girls more likely to be poor throughout life. Being poor makes teen girls more likely to get pregnant. Poverty isn’t something inflicted on teen mothers by some vindictive paternalistic cosmos, y’all… (via thepoliticalnotebook)
Scholarship and science are beginning to recognize a record that had been concealed by imperial arrogance. They are discovering that at the time of the arrival of the Europeans, and long before, the Western hemisphere was home to some of the world’s most advanced civilizations. In the poorest country of South America, archaeologists are coming to believe that eastern Bolivia was the site of a wealthy, sophisticated, and complex society of perhaps a million people. In their words, it was the site of “one of the largest, strangest, and most ecologically rich artificial environments on the face of the planet, with causeways and canals, spacious and formal towns and considerable wealth,” creating a landscape that was “one of humankind’s greatest works of art, a masterpiece.” In the Peruvian Andes, by 1491 the Inka had created the greatest empire in the world, greater in scale than the Chinese, Russian, Ottoman, or other empires, far greater than any European state, and with remarkable artistic, agricultural, and other achievements.
- Hopes and Prospects - Noam Chomsky (via noam-chomsky)
By 1970, U.S. share of world wealth had dropped to about 25%, roughly where it remains, still colossal but far below the end of World War II. By then, the industrial world was “tripolar”: US-based North America, German-based Europe, and East Asia, already the most dynamic industrial region, at the time Japan-based, but by now including the former Japanese colonies Taiwan and South Korea, and more recently China.
At about that time, American decline entered a new phase: conscious self-inflicted decline. From the 1970s, there has been a significant change in the U.S. economy, as planners, private and state, shifted it toward financialization and the offshoring of production, driven in part by the declining rate of profit in domestic manufacturing. These decisions initiated a vicious cycle in which wealth became highly concentrated (dramatically so in the top 0.1% of the population), yielding concentration of political power, hence legislation to carry the cycle further: taxation and other fiscal policies, deregulation, changes in the rules of corporate governance allowing huge gains for executives, and so on.
Meanwhile, for the majority, real wages largely stagnated, and people were able to get by only by sharply increased workloads (far beyond Europe), unsustainable debt, and repeated bubbles since the Reagan years, creating paper wealth that inevitably disappeared when they burst (and the perpetrators were bailed out by the taxpayer). In parallel, the political system has been increasingly shredded as both parties are driven deeper into corporate pockets with the escalating cost of elections, the Republicans to the level of farce, the Democrats (now largely the former “moderate Republicans”) not far behind.
A recent study by the Economic Policy Institute, which has been the major source of reputable data on these developments for years, is entitled Failure by Design. The phrase “by design” is accurate. Other choices were certainly possible. And as the study points out, the “failure” is class-based. There is no failure for the designers. Far from it. Rather, the policies are a failure for the large majority, the 99% in the imagery of the Occupy movements — and for the country, which has declined and will continue to do so under these policies.
They came, they feasted on smoked sturgeon and black truffle risotto, drank liquor paid for by global banks, endured dozens of security checks, and tried not to fall down in the snow. They talked about the perilous state of the global economy and the future of capitalism. Then, they headed back to their home countries — many in chauffeured limousines, some by private jet.
But as the people who run much of the planet wrapped up the annual festival of influence known as the World Economic Forum on Saturday, any sense of achievement was hard to discern. The participants arrived amid elevated unemployment in many economies, worries about government budget deficits, and fears that contagion from a financial crisis in Europe could infect the rest of the world. They went home with all of these worries intact, and perhaps reinforced.
Nouriel Roubini, the economist who — not for nothing — is known as “Doctor Doom,” noted that world leaders are divided on a great array of crucial issues, from arguments over trade imbalances and currency valuations to the threats posed by Iran and North Korea and the challenge of climate change.
“On all these issues that require international coordination, there is no agreement,” he said during a Saturday morning panel. “It’s a world of chaos that can lead to potential conflicts.”
European officials confronted a palpable sense of impatience and resentment from their counterparts, drawing accusations that they have imperiled the fate of the globe by repeatedly failing to prop up ailing member states.
In private conversations here this week, senior officials from the United States, Europe and Asia expressed a mixture of resignation and alarm that Greece may yet default on its government debts, despite several efforts by eurozone members to cobble together a credible rescue. Some warned that such an outcome could spook investors into pulling funds out of larger economies such as Italy and Spain, raising the prospect of defaults in those countries. A few suggested this could eventually trigger the breakup of the eurozone and the end of its shared currency, an event that could produce panic rivaling that seen after the investment banking giant Lehman Brothers collapsed more than three years ago.
In a riveting address here on Saturday, Hong Kong leader Donald Tsang recalled his place at the epicenter of the Asian financial crisis in the late 1990s, and the experience of the 2008 global credit pullback, asserting that the current situation is worse.
“I’ve never been as scared as now about the world, what is happening in Europe,” he said.
Hong Kong faces little direct exposure to potential defaults on European government bonds, Tsang added, but the global financial system is now so interconnected that this confers no protection. He wondered aloud about the health of financial institutions that trade with Hong Kong’s banks and the potential for trouble rippling out from the eurozone.
“We do not know how deep this hole will be when the whole thing implodes on us,” he said. “Nobody is immune.”